The Australian building sector does a lot for the economy, but also creates a shocking amount of pollution. 

Our slice of the national GDP is around 9 per cent. 

This puts us in a powerful position to drive positive change – by embracing construction methods that help the planet, instead of harming it. 

The best part? Sustainability doesn’t have to hurt our profits. 

In fact, financial gain often occurs for companies that embrace ecological design principles.

One particular renewable material even leads to cost savings of around 15 per cent for mid-rise buildings (we explore this example further down).

This article focuses on the financial AND ecological benefits of sustainable construction. 

We also look at some practical ideas that companies can adopt.

But first, why is sustainable construction so important?

Importance of sustainability in construction

The global construction industry produces 38 per cent of greenhouse gas emissions.

And Australia is one of the highest emitting countries in the world (per capita).

Why does this matter?

We’re now experiencing the highest levels of CO2 ever recorded. Too much atmospheric carbon dioxide pollutes the air, water and soil. This causes extreme weather and damages natural habitats – which in turn disrupts our food supply.

It’s not just about carbon pollution, but how we use precious resources too.

Water scarcity is one of the greatest challenges of our time, and yet the global construction sector uses around 15 per cent of the world’s freshwater resources.

Closer to home, there’s also our rubbish to think about…

Australia, it turns out, generates a lot of waste and ranks poorly on recycling. 

waste management in building sector

Growing numbers of people care about this.

Many construction companies are now adopting green measures to help the planet, and boost their bottom line – as more Aussie consumers prioritise the environment when choosing a product or service.

What is sustainable construction and design?

Sustainable construction is the practice of using energy efficient methods and materials to reduce the ecological impact of commercial and residential structures. 

The best approach: 

Contractors, suppliers, tradies, architects and engineers work together to ensure that every stage of the project meets performance and safety standards – while also supporting the environment.

However, it’s not uncommon to apply green building principles to certain stages only (the more the better).

These may include:

  • Planning
  • Site development
  • Design and architecture
  • Materials (manufacturing, importing and exporting)
  • Energy consumption (gas, water and electricity)
  • Building new structures
  • Renovating existing structures
  • Demolition
  • Waste management

Examples of ecological strategies that improve building quality and lower costs…

Sustainable building materials (high performance): These usually come from renewable sources, or can be recycled easily. Such options are generally cheaper than conventional materials, but even when more expensive, they often generate energy savings for the property owner (we talk more about this soon). At the same time, they maintain – and sometimes exceed – building quality standards.

The list is extensive and growing rapidly as innovation accelerates. Here are some ideas from an article we previously wrote:

  • Green thermal insulation
  • Structural insulated panels
  • Recycled metal
  • Reclaimed wood
  • Engineered Wood
  • Precast concrete slabs
  • Bamboo
  • Cork

There’s also cement made out of recycled plastic

Cool roofs (eco-building design): Materials and colours that reflect heat and sunlight are carefully selected to build roofs. This demonstrates how clever green design can maintain optimal inside temperatures – minimising the use of conventional air conditioning. This article by The Fifth Estate examines the topic in more depth from different angles.

Certified green buildings: Green buildings incorporate sustainable measures at every stage of the project. There are strict guidelines for green star certification – a voluntary rating system in Australia and other parts of the world. Green building benefits include fewer carbon emissions, lower construction costs and higher property value (more on this below).

Modular construction: Modular structures are built offsite in a controlled manufacturing plant, instead of on the property. Entire homes and buildings can be constructed in separate “modules” and then put together on site – following conventional codes and standards. The advantage is that less waste is created, and projects can be completed up to 50 per cent faster than usual. 

economical benefits of sustainable construction

Financial benefits of sustainable construction (more profit)

  • Lower construction costs
  • More sales from meeting consumer demand for sustainability
  • Higher property value 
  • Lower operating costs for tenants and homeowners 

Lower construction costs:

Companies that use high-performing sustainable building materials usually spend less on labour.

Look at the example of engineered cross laminated timber (CLT). 

It’s strong, stable and lightweight – needing a smaller foundation than conventional materials like steel and concrete.

Less time is spent on-site, which lowers building costs and shortens the construction period. Cost savings can be as high as 15 per cent for mid-rise buildings, according to AXA XL Insurance.

“The speed of install for CLT vs. traditional materials varies. Installation is anecdotally faster than light gauge steel by 1/3 or so, and similar to above grade Cast-in-Place superstructure. The structure is stable and tough as soon as it is placed, so builders realize quicker trade ready states, and are able to sequence following trades immediately while keeping them safe.”

Another example is cement that’s made from recycled plastic. 

Plastic concrete is often cheaper than traditional mixes, making it a cost-effective solution. Money is saved on transport and labour, because builders are more productive with a material that’s 10 to 40 per cent lighter than conventional concrete.

The Guardian reports cost savings of 8 per cent, when talking about one of the first roads to be built using shredded plastic tar.

Higher sales from meeting consumer demand for sustainability:

Many consumers care about the environment and seek out businesses that share their values. 

According to research firm Nielsen:

“…a whopping 81% of global respondents feel strongly that companies should help improve the environment”.

This often triggers a domino effect down the supply chain. Corporate social responsibility is no longer considered a nice “bonus” – it now actively influences buyer behaviour.

Consider these findings from the 2013 Echo Global CSR Study:

ecological building practices increase profit for businesses

Higher property value (green buildings and houses)

People are willing to pay more for structures that have been built ethically. 

Returns on investment are consistently higher for certified green buildings, which outperform the broader office market.

Consider this 2011 report by the Australian Property Institute and Property Funds Association. Compared to non-rated buildings, green buildings deliver:

  • 12 per cent ‘green premium’ in value
  • Five per cent rent premiums 

This gives property developers a competitive advantage in a bloated market – especially as more corporations and government agencies add sustainable principles to their property requirements. 

If you’re interested, the World Green Building Council has updated research here.

Lower operating costs:

Tenants and homeowners save on utility bills when buildings use sustainable insulation materials and clever design. This is especially true for certified green buildings that consider their environmental impact at every stage of the project. 

One study from Indonesia shows utility costs are 30 to 80 per cent lower in such cases. 

What about our own backyard?

Property group GPT has already achieved carbon neutral status for three of its buildings. This translates to savings over $210 million for energy costs since 2005.

“…GPT considers actions to reduce our energy consumption as the most important contribution that we can make to climate change mitigation,” said Mark Fookes, the Chief Operating Officer.   

“Cutting the energy use of our buildings and moving to a zero carbon target also makes good business sense.”

green construction helps the environment

Ecological benefits of an ethical building approach (less damage)

  • Reduce waste
  • Lower carbon emissions
  • Use fewer natural resources 

The building sector is best placed to lower greenhouse emissions, when compared to other large emitters – according to the UN Environment Programme. 

There’s actually potential for the construction sector to act as a carbon sink in the future (absorbing and storing carbon) rather than releasing it into the atmosphere.

As for Australia:

Our commercial and residential building sector could contribute 28% to the nation’s 2030 emissions reduction target.

And we’re already seeing impressive results in at least one field:

Certified green star buildings in Australia produce 62% fewer carbon emissions than average Australian buildings – according to the Green Building Council of Australia (GBCA).

The GBCA also says that green buildings can:

  • Save more water 
  • Use less electricity

One success story is Melbourne University’s The Spot building, which used 46 per cent less energy than similar buildings across the University.

But wait, sustainability benefits aren’t restricted to certification programs. 

Let’s talk about resource management…

Renewable building materials conserve an enormous amount of energy that normally goes into the manufacturing process.

For example, the mining of metal takes a massive toll on the environment. Keep in mind, ore is a finite resource that already shows signs of being in short supply. 

One solution: 

Building with recycled steel, which keeps its properties even after being recycled multiple times (there’s no loss of quality).

And amazingly, 75 percent less energy is used every time that steel is repurposed as a building material. 

Barriers to sustainable construction on a systemic level

Although more companies are using green construction practices, there are some obstacles.

the obstacles that prevent ecological construction from occuring

NSW Building Commissioner David Chandler is focused on the creation of “trustworthy buildings” that don’t harm people or the environment.

He told the Fifth Estate that industry players need to be shown how they benefit from eco-friendly construction.  

“We have to realise that people do things when you convince them that it makes sense to do it. At times, we have too lofty a conversation about lowering the carbon footprint of our industry. You have to unpack that for people.”

This idea extends to reducing waste on construction sites too. 

Nilupa Udawatta, a lecturer of construction management at Deakin University, said resistance to change is blocking progress – in an interview with Renew Magazine

Financial incentives could motivate a shift, especially for builders who are struggling in this competitive industry.

You might think that strict government regulation would be the obvious solution instead, but it doesn’t always work – as seen in Hong Kong, where illegal dumping arose from higher landfill costs.

On top of this, the construction industry can be fragmented, which hinders widespread systemic changes.

“In the traditional arrangement, there is a lack of coordination or communication between builders, contractors and subcontractors, so it’s hard to implement [waste management plans].”

Throw a global pandemic into the mix and the barriers get even stronger, as businesses struggle to stay afloat amid social distancing regulations and trade restrictions. 

However, COVID-19 may also present an opportunity to examine the way our industry operates, so we can transition to more efficient and eco-friendly strategies in the face of uncertainties of all kinds.

benefits of green construction practices

How to improve sustainability in construction (actionable ideas for your site)

1. Better waste management – spend more time on the design process and only order the amount of materials that you need. Collect all recyclables that are no longer required and set up a designated storage zone, to allocate the resources elsewhere. This may include metals, glass, wood, plastic, bricks and insulation. For more information, here’s a guide

2. A few other site management considerations:

  • Create a preservation plan that clearly shows trees and plants that are not to be disturbed.
  • Arrange for trees to be planted in construction areas that have been disturbed (when practical).
  • Create a detailed plan for framing structures, so that materials aren’t wasted. 
  • Silt sacks, rock filters, silt fencing and straw bales can protect nearby streams and lakes from runoff.
  • Install terracing and retaining walls for long-term erosion control (upon building completion)

3. Save paper: consider using digital processes instead of paper for planning sessions. This study shows the engineering and construction sector is one of the least digitised – relying heavily on paper.

4. Install renewable energy sources such as solar panels to lower heating costs (interestingly, rooftop solar panels also cool buildings by acting as roof shades)

5. Think about using modular construction for at least part of your project, to reduce pollution and speed up production time.

6. Consider innovative designs and technologies for water conservation, such as: low-flow plumbing fixtures, grey water recycling systems, rainwater harvesting, pressure-reducing valves, insulated piping and storage tanks.

7. Incorporate green building materials throughout your construction process, and install eco-friendly insulation (such as sheep’s wool and cellulose) for energy savings. 

8. Are you serious about building a high-performance and low-carbon building? Read these practical and comprehensive guides for low-carbon commercial and residential properties (new builds and retrofits). An Australian research hub created these to explain best practice for various phases of the building lifecycle. 

9. Check out these useful resources and certification tools: